The bulls are running.
Last week, the Standard & Poor's 500 Index set a new record, closing above 3,000 for the first time. Other major U.S. stock indices also finished at record highs, reported Barron's.
Company fundamentals, investor sentiment, and geopolitics all have the power to push stock prices higher. However, according to Financial Times, last week's gains were attributed to Federal Reserve Chair Jerome Powell's testimony before Congress and the expectation the Federal Reserve will lower the Fed funds rates in July.
Financial Times
reported:
"Mr. Powell laid out the case for monetary easing by highlighting some softness in indicators such as business fixed investment and persistently low inflation. But mostly, he stressed the impact of uncertainty stemming from trade tensions, weak global growth, the possibility that the U.S. Congress fails to raise the debt ceiling, and a no-deal Brexit."
Investors were encouraged by the possibility of monetary easing. Yardeni Research charted data showing the Investors Intelligence bull/bear ratio rose to 3.1 on July 9. It was 2.94 on June 25 and 3.05 on July 2, which indicates bullishness has been increasing.
An Investors Intelligence bull/bear ratio greater than 1 typically indicates high levels of bullishness, while a bull/bear ratio of less than 1 typically indicates high levels of bearishness. The ratio generally is considered a contrarian indicator, explained Investing Answers.
Year-to-date, the Standard & Poor's 500 Index is up 20.2 percent.
|
Data as of 7/12/19
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
0.8%
|
20.2%
|
7.7%
|
11.9%
|
8.8%
|
12.8%
|
|
Dow Jones Global ex-U.S.
|
-0.6
|
11.5
|
-2.3
|
5.9
|
0.0
|
4.7
|
|
10-year Treasury Note (Yield Only)
|
2.1
|
NA
|
2.9
|
1.5
|
2.6
|
3.4
|
|
Gold (per ounce)
|
1.4
|
9.8
|
13.0
|
1.6
|
1.5
|
4.5
|
|
Bloomberg Commodity Index
|
2.4
|
5.6
|
-3.6
|
-2.5
|
-9.1
|
-3.4
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
